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Mexico has issued a new benchmark 10-year bond as part of a debt refinancing operation that did not increase government debt levels and underscored increasing confidence in the country’s assets after a recent rally in the peso and stocks.

The $3.15bn new bond issue, yielding 4.19 per cent and with a 4.15 per cent coupon was 3.2 times oversubscribed and 380 international investors came forward.

The programme to improve Mexicio’s debt profile is part of the finance ministry’s plan to stabilise and begin reducing public debt levels to 50.2 per cent of GDP from 50.5 per cent last year.

The operation included the $1.644bn early repayment of a dollar-denominated bond due March 2019, the buyback of $500m dollar bonds along the yield curve to promote a more liquid secondary market; and the withdrawal of $1.006bn in bonds in circulation due between 2020 and 2025. Holders of those bonds were offered the option to swap their bonds for the new 10-year issue.

Mexican assets – especially the peso – took a hammering after the election of Donald Trump because of uncertainty over future policies, but recent conciliatory noises out of Washington about the future of the North American Free Trade Agreement have helped the peso rally to a post-election high.